-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L0qquGwC3fpUXNKtdpOV994K7IUYJKWFLHiDKq5RY/CtzFC/uzEiyAREdj9kNFqT 4Vqn8/aEEG7eBIzKqr2heg== 0000743872-98-000025.txt : 19981214 0000743872-98-000025.hdr.sgml : 19981214 ACCESSION NUMBER: 0000743872-98-000025 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19981210 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19981211 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOMESTAKE MINING CO /DE/ CENTRAL INDEX KEY: 0000743872 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 942934609 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-08736 FILM NUMBER: 98767833 BUSINESS ADDRESS: STREET 1: 650 CALIFORNIA ST STREET 2: 9TH FL CITY: SAN FRANCISCO STATE: CA ZIP: 94108-2788 BUSINESS PHONE: 4159818150 MAIL ADDRESS: STREET 1: 650 CALIFORNIA ST CITY: SAN FRANCISCO STATE: CA ZIP: 94108-2788 8-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): December 10, 1998 (December 1, 1998) HOMESTAKE MINING COMPANY (Exact name of Registrant as specified in its charter) Delaware 1-8736 94-2934609 (State or other (Commission (I.R.S. Employer jurisdiction of File Number) Identification Number) incorporation) 650 California Street, San Francisco, California 94108-2788 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (415) 981-8150 http://www.homestake.com Item 5. Other Items 1. Acquisition of Prime Resources Group Inc./Special Meeting of Stockholders On December 1, 1998 at a Special Meeting of Stockholders, Homestake Mining Company stockholders approved a Restated Certificate of Incorporation. The restated certificate has increased the number of authorized shares of Homestake Common Stock from 250,000,000 to 450,000,000, increased the number of authorized shares of Series A Preferred Stock from 2,500,000 to 4,500,000, created one share of Special Voting Stock and made certain technical changes, primarily to reflect the existence of the Special Voting Stock. Homestake's stockholders also approved an Outside Directors' Stock Compensation Plan that provides for external directors to receive a portion of their compensation in Homestake common stock. Stockholder votes were as follows:
Restated Certificate of Incorporation Votes For Votes Against Abstentions Non-Vote 118,294,460 16,092,719 819,490 35,556,668 1998 Outside Directors' Stock Compensation Plan Votes For Votes Against Abstentions Non-Vote 163,842,374 4,621,467 2,299,496 -0-
On December 1, 1998 Homestake announced that the shareholders of Prime Resources Group Inc. ("Prime") approved a Plan of Arrangement to accept Homestake's offer to acquire the 49.4% of Prime it did not already own. Under the Plan of Arrangement, for each Prime Common Share outstanding (other than Prime Common Shares held by Homestake and its wholly owned subsidiaries), Prime shareholders had the option of receiving 0.74 of a Homestake Mining Company Common Share or 0.74 of a Homestake Canada Inc. Exchangeable Share ("HCI Exchangeable Share"). Each HCI Exchangeable Share is exchangeable for one share of Homestake Mining Company Common Stock at any time at the option of the holder and has essentially the same voting, dividend (payable in Canadian dollars), and other rights as one share of Homestake Common Stock. The Special Voting Stock referred to above was issued to Montreal Trust Company of Canada, in trust for the holders of the HCI Exchangeable Shares, and provides the mechanism for holders of HCI Exchangeable Shares to receive voting rights in Homestake Mining Company. On December 3, 1998 Homestake announced it had completed the acquisition of the 49.4% of Prime it did not already own. As a result of this transaction, Homestake owns 100% of Prime through Homestake's wholly owned subsidiary, Homestake Canada Inc. Homestake has issued an additional 16.7 million shares of Homestake Common Stock and has reserved 11.1 million shares of Homestake Common Stock for issuance on exchange of the HCI Exchangeable Shares. Copies of the Registrant's December 1, 1998 and December 3, 1998 news releases are attached as Exhibit 99.7 and Exhibit 99.8, respectively. The Restated Certificate of Incorporation of the Registrant is attached as Exhibit 3.6. The 1998 Outside Directors' Stock Compensation Plan of the Registrant is attached as Exhibit 10.4. 7(c) Exhibits 3.6 Restated Certificate of Incorporation 10.4 1998 Outside Directors' Stock Compensation Plan 99.7 News Release, dated December 1, 1998, announcing Prime Resources Group Inc.'s acceptance of the Registrant's offer. 99.8 News Release, dated December 3, 1998 announcing the Registrant's completion of the acquisition of the 49.4% of Prime Resources Group Inc. it did not already own. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: December 10, 1998 HOMESTAKE MINING COMPANY (Registrant) By: /s/ David W. Peat ------------------ David W. Peat Vice President and Controller EX-3 2 RESTATED CERT OF INCORP EXHIBIT 3.6 RESTATED CERTIFICATE OF INCORPORATION OF HOMESTAKE MINING COMPANY In accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware, HOMESTAKE MINING COMPANY does hereby amend and restate its Restated Certificate of Incorporation. HOMESTAKE MINING COMPANY was incorporated under the name HOMESTAKE MINING CORPORATION, and the original Certificate of Incorporation was filed with the Secretary of State on November 28, 1983. This Restated Certificate of Incorporation was duly adopted by the Stockholders and the Board of Directors of the Company in accordance with Sections 242 and 245 of the Delaware General Corporation Law, as amended. The text of the Restated Certificate of Incorporation is hereby amended and restated so as to read in its entirety as follows: ONE: The name of this corporation is HOMESTAKE MINING COMPANY. TWO: The address of the registered office of the Company in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle, and the name of its registered agent at that address is The Corporation Trust Company. THREE: The purpose of the Company is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. FOUR: The total number of shares of all classes of stock which the Company is authorized to issue is 460,000,001 shares. Of these, 450,000,000 shares shall be shares of common stock and the par value of each such share shall be $1.00 ("Common Stock"), 10,000,000 shares shall be shares of preferred stock and the par value of each such share shall be $1.00 ("Preferred Stock"), and one share shall be a share of special voting stock with certain voting rights and the par value of such share shall be $1.00 ("Special Voting Stock"). The aggregate par value of all shares is $460,000,001. The number of shares of Preferred Stock authorized by this Article FOUR may be increased or decreased (but not below the number of shares then outstanding) by the affirmative vote of the holders of a majority of the total voting power of all outstanding shares of the Common Stock and Special Voting Stock of the Company and, subject to any limitation imposed in any resolution adopted by the Board of Directors providing for the issue of any particular series of Preferred Stock, the holders of Preferred Stock shall not be entitled to vote upon any such increase or decrease. The record holder of the Special Voting Stock shall not be entitled to receive any dividends or other distributions or to receive or participate in any distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up of the Company. Except as otherwise required by applicable law, at each annual or special meeting of stockholders of the Company the record holder of the Special Voting Stock shall be entitled to vote on all matters submitted to a vote of the holders of the Common Stock, voting together with the holders of the Common Stock as a single class (except as otherwise provided herein or by applicable law), and the record holder of the Special Voting Stock shall be entitled to cast on any such matter a number of votes equal to the number of Exchangeable Shares ("Exchangeable Shares") of Homestake Canada Inc. and its successors at law, whether by merger, amalgamation or otherwise, outstanding as of the record date for such annual or special meeting of stockholders, which are not owned by the Company or any subsidiary of the Company. At such time as no Exchangeable Shares (other than Exchangeable Shares owned by the Company or any subsidiary of the Company) shall be outstanding and there are no shares of stock, debt, options or other agreements which could give rise to the issuance of any Exchangeable Shares to any person (other than the Company or any subsidiary of the Company), the share of Special Voting Stock shall automatically be redeemed for $1.00, and upon any such redemption or other purchase or acquisition of the Special Voting Stock by the Company the share of Special Voting Stock shall be deemed retired and canceled and may not be reissued. FIVE: The Board of Directors shall have the authority, subject to limitations prescribed by law and the provisions of this Article FIVE, to determine and provide for the issuance of Preferred Stock in one or more series and to establish or alter the number of shares to be included in each such series, and to fix the voting powers, designations, preferences and relative, participating, optional or other rights, if any, and the qualifications, limitations or restrictions of the shares of each such series of Preferred Stock. The Board of Directors shall have the authority, subject to the limitations stated in any resolution or resolutions originally fixing the number of shares constituting any series, to increase or decrease (but not below the number of shares of such series then outstanding) the number of shares of any such series subsequent to the issuance of shares of that series. In case the number of shares of any series shall be so decreased, the shares constituting such decrease shall resume the status of authorized but unissued shares of Preferred Stock. The authority of the Board of Directors with respect to each series shall include, but not be limited to, the authority to determine, by resolution or resolutions providing for the issue of shares of each series, the following: (1) the number of shares in and distinctive designation of each series; (2) the dividend rate on each series and whether dividends shall be cumulative; (3) the voting rights, if any, of the shares of each series in addition to those required by law, including the number of votes per share and any rights of the shares of each series to vote as a separate class in connection with any specified transaction or item of business; (4) whether each series shall have conversion privileges and, if so, the terms and conditions of such conversion; (5) whether the shares of each series shall be redeemable and, if so, the terms and conditions of such redemption; (6) the rights of each series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Company; (7) whether each series shall 2 be subject to the operation of a purchase, retirement or sinking fund and, if so, the terms and conditions thereof; and (8) any other preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions of each series. ------- Series A Participating Cumulative Preferred Stock Section 1. Designation and Number of Shares. The shares of such series shall be designated as "Series A Participating Cumulative Preferred Stock" (the "Series A Preferred Stock"). The par value of each share of the Series A Preferred Stock shall be $1.00. The number of shares constituting the Series A Preferred Stock shall be 4,500,000; provided however, that if more than a total of 4,500,000 shares of Series A Preferred Stock shall be issuable upon the exercise of Rights issued pursuant to the Rights Agreement dated as of October 16, 1987, as amended, (the "Rights Agreement"), the Board of Directors of the Company, pursuant to Section 151(g) of the General Corporation Law of the State of Delaware, shall direct by resolution or resolutions that a certificate be properly executed, acknowledged, filed and recorded, in accordance with the provisions of Section 103 thereof, providing for the total number of shares of Series A Preferred Stock authorized to be issued be increased (to the extent that this Restated Certificate of Incorporation then permits) to the largest number of whole shares (rounded up to the nearest whole number) issuable upon exercise of such Rights. Section 2. Dividends or Distributions. (a) Subject to the prior and superior rights of the holders of shares of any other series of Preferred Stock or other class of capital stock not by its terms ranking on a parity with, or junior to, the shares of Series A Preferred Stock with respect to dividends, the holders of shares of the Series A Preferred Stock shall be entitled to receive, when and as declared by the Board of Directors, out of the assets of the Company legally available therefor, (1) quarterly dividends payable in cash on the first day of March, June, September and December in each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or a fraction of a share of Series A Preferred Stock, of $10 per whole share (rounded to the nearest cent) less the amount of all cash dividends declared on the Series A Preferred Stock pursuant to the following clause (2) since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Preferred Stock, and (2) dividends payable in cash on the payment date for each cash dividend declared on the Common Stock in an amount per whole share (rounded to the nearest cent) equal to the Formula Number then in effect times the cash dividends then to be paid on each share of Common Stock. In addition, if the Company shall pay any dividend or make any distribution on the Common Stock payable in assets, securities or other forms of noncash consideration (other than dividends or distributions solely in shares of Common Stock), then, in each such case, the Company shall simultaneously pay or make on each outstanding share of Series A Preferred Stock a dividend or distribution in like kind of the Formula Number then in 3 effect times such dividend or distribution on each share of the Common Stock. As used herein, the "Formula Number" shall be 100; provided, however, that if at any time after November 2, 1987, the Company shall (i) declare or pay any dividend on the Common Stock payable in shares of Common Stock or make any distribution on the Common Stock in shares of Common Stock, (ii) subdivide (by a stock split or otherwise) the outstanding shares of Common Stock into a larger number of shares of Common Stock or (iii) combine (by a reverse stock split or otherwise) the outstanding shares of Common Stock into a smaller number of shares of Common Stock, then in each such event the Formula Number shall be adjusted to a number determined by multiplying the Formula Number in effect immediately prior to such event by a fraction, the numerator of which is the number of shares of Common Stock that are outstanding immediately after such event and the denominator of which is the number of shares that are outstanding immediately prior to such event (and rounding the result to the nearest whole number); and provided further, that if at any time after November 2, 1987, the Company shall issue any shares of its capital stock in a reclassification or change of the outstanding shares of Common Stock (including any such reclassification or change in connection with a merger in which the Company is the surviving corporation), then in each such event the Formula Number shall be appropriately adjusted to reflect such reclassification or change. (b) The Company shall declare a dividend or distribution on the Series A Preferred Stock as provided in Section 2(a) immediately prior to or at the same time it declares a dividend or distribution on the Common Stock (other than a dividend or distribution solely in shares of Common Stock); provided, however, that, in the event no dividend or distribution (other than a dividend or distribution in shares of Common Stock) shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $10 per share on the Series A Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date. The Board of Directors may fix a record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a dividend or distribution declared thereon, which record date shall be the same as the record date for any corresponding dividend or distribution on the Common Stock. (c) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Preferred Stock from and after the Quarterly Dividend Payment Date next preceding the date of original issue of such shares of Series A Preferred Stock; provided, however, that dividends on such shares which are originally issued after the record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a quarterly dividend and on or prior to the next succeeding Quarterly Dividend Payment Date shall begin to accrue and be cumulative from and after such Quarterly Dividend Payment Date. Notwithstanding the foregoing, dividends on shares of Series A Preferred Stock which are originally issued prior to the record date for the first Quarterly Dividend Payment, shall be calculated as if cumulative from and after the March 1, June 1, September 1 or December 1, as the case may be, next preceding the date of original issuance of such shares. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. 4 (d) So long as any shares of the Series A Preferred Stock are outstanding, no dividends or other distributions shall be declared, paid or distributed, or set aside for payment or distribution, on the Common Stock unless, in each case, the dividend required by this Section 2 to be declared on the Series A Preferred Stock shall have been declared. (e) The holders of the shares of Series A Preferred Stock shall not be entitled to receive any dividends or other distributions except as provided herein. Section 3. Voting Rights. The holders of shares of Series A Preferred Stock shall have the following voting rights: (a) Each holder of Series A Preferred Stock shall be entitled to a number of votes equal to the Formula Number then in effect, for each share of Series A Preferred Stock held of record on each matter on which holders of the Common Stock are entitled to vote, multiplied by the maximum number of votes which the holders of the Common Stock then have with respect to such matter. (b) Except as otherwise provided herein or by applicable law, the holders of shares of Series A Preferred Stock and the holders of shares of Common Stock shall vote together as one class for the election of directors of the Company and on all other matters submitted to a vote of stockholders of the Company. (c) If at the time of any annual meeting of stockholders for the election of directors, the equivalent of six quarterly dividends (whether or not consecutive) payable on any share or shares of Series A Preferred Stock are in default, the number of directors constituting the Board of Directors of the Company shall be increased by two. In addition to voting together with the holders of Common Stock for the election of other directors of the Company, the holders of record of the Series A Preferred Stock, voting separately as a class to the exclusion of the holders of Common Stock, shall be entitled at said meeting of stockholders (and at each subsequent annual meeting of stockholders), unless all dividends in arrears have been paid or declared and set apart for payment prior thereto, to vote for the election of two directors of the Company, the holders of any Series A Preferred Stock being entitled to cast a number of votes per share of Series A Preferred Stock equal to the Formula Number. Until the default in payments of all dividends which permitted the election of said directors shall cease to exist any director who shall have been so elected pursuant to the next preceding sentence may be removed at any time, either with or without cause, only by the affirmative vote of the holders of the shares at the time entitled to cast a majority of the votes entitled to be cast for the election of any such director at a special meeting of such holders called for that purpose, and any vacancy thereby created may be filled by the vote of such holders. If and when such default shall cease to exist, the holders of the Series A Preferred Stock shall be divested of the foregoing special voting rights, subject to revesting in the event of each and every subsequent like default in payments of dividends. Upon the termination of the foregoing special voting rights, the terms of office of all persons who may have been elected directors pursuant to said special voting rights shall forthwith terminate, and the number of directors constituting the Board of Directors shall be reduced by two. The voting 5 rights granted by this Section 3(c) shall be in addition to any other voting rights granted to the holders of the Series A Preferred Stock in this Section 3. (d) Except as provided herein, in Section 11 or by applicable law, holders of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for authorizing or taking any corporate action. Section 4. Certain Restrictions. (a) Whenever quarterly dividends or other dividends or distributions payable on the Series A Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Preferred Stock outstanding shall have been paid in full, the Company shall not (i) declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock; (ii) declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except dividends paid ratably on the Series A Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; (iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, provided that the Company may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock of the Company ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Preferred Stock: or (iv) purchase or otherwise acquire for consideration any shares of Series A Preferred Stock, or any shares of stock ranking on a parity with the Series A Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes. (b) The Company shall not permit any subsidiary of the Company to purchase or otherwise acquire for consideration any shares of stock of the Company unless the Company 6 could, under paragraph (a) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner. Section 5. Liquidation Rights. Upon the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, no distribution shall be made (1) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution, or winding up) to the Series A Preferred Stock unless, prior thereto, the holders of shares of Series A Preferred Stock shall have received an amount equal to the accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, plus an amount equal to the greater of (x) $75 per share or (y) an aggregate amount per share equal to the Formula Number then in effect times the aggregate amount to be distributed per share to holders of Common Stock, or (2) to the holders of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except distributions made ratably on the Series A Preferred Stock and all other such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up. Section 6. Consolidation, Merger, etc. In case the Company shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash or any other property, then in any such case the then outstanding shares of Series A Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share equal to the Formula Number then in effect times the aggregate amount of stock, securities, cash or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is exchanged or changed. Section 7. No Redemption; No Sinking Fund. (a) The shares of Series A Preferred Stock shall not be subject to redemption by the Company or at the option of any holder of Series A Preferred Stock; provided, however, that the Company may purchase or otherwise acquire outstanding shares of Series A Preferred Stock in the open market or by offer to any holder or holders of shares of Series A Preferred Stock. (b) The shares of Series A Preferred Stock shall not be subject to or entitled to the operation of a retirement or sinking fund. Section 8. Ranking. The Series A Preferred Stock shall rank junior to all other series of Preferred Stock of the Company, unless the Board of Directors shall specifically determine otherwise in fixing the powers, preferences and relative, participating, optional and other special rights of the shares of such series and the qualifications, limitations and restrictions thereof. Section 9. Fractional Shares. The Series A Preferred Stock shall be issuable upon exercise of the Rights issued pursuant to the Rights Agreement in whole shares or in any fraction of a share that is not smaller than one one-hundredth (l/l00th) of a share or any integral 7 multiple of such fraction. In lieu of fractional shares, the Company, prior to the first issuance of a share or a fraction of a share of Series A Preferred Stock, may elect (1) to issue certificates evidencing such authorized fraction of a share of Series A Preferred Stock or (2) to issue depository receipts evidencing such authorized fraction of a share of Series A Preferred Stock pursuant to an appropriate agreement between the Company and a depository selected by the Company, provided that such agreement shall provide that the holders of such depository receipts shall have all the rights, privileges and preferences to which they are entitled as beneficial owners of the Series A Preferred Stock. Section 10. Reacquired Shares. Any shares of Series A Preferred Stock purchased or otherwise acquired by the Company in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock, without designation as to series until such shares are once more designated as part of a particular series by the Board of Directors pursuant to the provisions of Article FIVE hereof. Section 11. Amendment. None of the powers, preferences and relative, participating, optional and other special rights of the Series A Preferred Stock as provided herein shall be amended in any manner which would alter or change the powers, preferences, rights or privileges of the holders of Series A Preferred Stock so as to affect them adversely without the affirmative vote of the holders of at least 66 2/3% of the outstanding shares of Series A Preferred Stock, voting as a separate class. ---------- SIX: No holder of shares of stock of any class of the Company shall be entitled as of right to purchase or subscribe for any part of any unissued stock of the Company or of any new or additional authorized stock of the Company of any class whatsoever, or of any issue of securities of the Company convertible into stock, whether such stock or securities be issued for money or for a consideration other than money or by way of dividend, but any such unissued stock or such new or additional authorized stock or such securities convertible into stock may be issued and disposed of to such persons, firms, corporations and associations, and upon such terms as may be deemed advisable by the Board of Directors without offering to stockholders then of record or any class of stockholders any thereof upon any terms. SEVEN: In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, repeal, alter, amend and rescind any or all of the bylaws of the Company. EIGHT: The number of directors of the Company shall be fixed from time to time by a bylaw or amendment thereof duly adopted by the Board of Directors or by the stockholders, or except as may be set forth in a certificate filed under Section 151(g) of the General Corporation Law of the State of Delaware pursuant to Article FIVE hereof. 8 NINE: The Board of Directors shall be and is divided into three classes, Class I, Class II and Class III, as nearly equal in number of directors as possible, with the term of office of the directors of one class expiring each year. Each director shall be elected to serve for a term ending on the date of the third annual meeting of stockholders following the annual meeting of stockholders at which such director was elected. In the event of any change in the authorized number of directors, the Board of Directors shall apportion any newly created directorships to, or reduce the number of directorships in, such class or classes as shall, so far as possible, equalize the number of directors in each class. If, consistently with the rule that the three classes shall be as nearly equal in number of directors as possible, any newly created directorships may be allocated to more than one class, the Board of Directors shall allocate them to the classes the terms of office of which are due to expire at the latest date following such allocation. Notwithstanding any of the foregoing, each director shall serve for a term continuing until the annual meeting of stockholders at which the term of the class to which he was elected expires and until his successor is elected and qualified or until his earlier death, resignation or removal. Any vacancies in the Board of Directors for any reason, including any newly created directorships resulting from any increase in the number of directors, may be filled by the Board of Directors, acting by a majority of the directors then in office, although less than a quorum; and any directors so chosen shall hold office until the next election of the class for which such directors shall have been chosen, and until their successors shall be elected and qualified. The provisions of this Article NINE shall be subject to the provisions of a certificate filed under Section 151(g) of the General Corporation Law of the State of Delaware pursuant to Article FIVE hereof. TEN: Except as may be set forth in a certificate filed under Section 151(g) of the General Corporation Law of the State of Delaware pursuant to Article FIVE hereof, a director may be removed from office only for cause, and only by the affirmative vote of the holders of a majority of the total voting power of all outstanding shares of stock of the Company entitled to vote at an election of directors and who would be entitled to vote for the election of a director to fill the vacancy created by such removal. ELEVEN: Elections of directors shall be by written ballot unless the bylaws of the Company shall otherwise provide. TWELVE: No action shall be taken by the stockholders except at an annual or special meeting of stockholders. THIRTEEN: Special meetings of the stockholders of the Company for any purpose or purposes may be called at any time only by the Board of Directors, the Chairman of the Board 9 of Directors, the President, a committee of the Board of Directors which has been duly designated by the Board of Directors and whose powers and authority, as provided in a resolution of the Board of Directors or in the bylaws of the Company, include the power to call such meeting, or by stockholders having not less than seventy-five percent (75%) of the total voting power of all outstanding shares of stock of the Company, and such special meetings may not be called by any other person or persons; provided, however, that if and to the extent that any special meeting of stockholders may be called by any other person or persons specified in any provisions of the Restated Certificate of Incorporation or any amendment thereto, or any certificate filed under Section 151(g) of the General Corporation Law of the State of Delaware pursuant to Article FIVE hereof, then such special meeting may also be called by such person or persons in the manner, at the times and for the purposes so specified. FOURTEEN: Except as may be set forth in a certificate filed under Section 151(g) of the General Corporation Law of the State of Delaware pursuant to Article FIVE hereof requiring a specified percentage of the voting power of any series of Preferred Stock created pursuant thereto, the approval or authorization of any "Business Combination" (as defined in Article FIFTEEN hereof) of the Company with any "Related Person" (as defined in Article FIFTEEN hereof) (i) shall require the affirmative vote of the holders of not less than eighty percent (80%) of the total voting power of all outstanding shares of stock of the Company having the right to vote in respect of such Business Combination, and (ii) also shall require the affirmative vote of the holders of not less than a majority of the voting power of all outstanding shares of stock so entitled to vote held by stockholders other than such Related Person and its Affiliates and Associates (as defined in Article FIFTEEN hereof); provided, however, that the voting requirements provided by clauses (i) and (ii) above shall not be applicable if: (A) The Business Combination was approved by the Board of Directors of the Company prior to the time the Related Person in question first became a Related Person; or (B) The Business Combination was approved by the Board of Directors of the Company after the time the Related Person in question first became a Related Person, but only if such Related Person obtained the unanimous approval of the Board of Directors of the Company to his becoming a Related Person, which approval was obtained prior to his becoming a Related Person; or (C) The Business Combination is solely between the Company and another corporation, fifty percent (50%) or more of the voting stock of which is owned by the Company and none of which is owned by a Related Person, provided that each stockholder of the Company receives the same type of consideration in such transaction as every other stockholder of the same class in proportion to his stockholdings and each holder of Common Stock of the Company receives or retains Common Stock in the surviving corporation or in any other corporation which is a party to such Business Combination; or (D) All of the following conditions are satisfied: 10 (1) The cash or fair market value of the property, securities or "Other Consideration To Be Received" (as defined in Article FIFTEEN hereof) per share by holders of Common Stock of the Company in the Business Combination is not less than the higher of (i) the highest per share price (including brokerage commissions, soliciting dealers' fees, dealer-management compensation, and other expenses, including, but not limited to, costs of newspaper advertisements, printing expenses and attorneys' fees) paid by such Related Person in acquiring any of its holdings of Common Stock of the Company or (ii) an amount which bears the same or a greater percentage relationship to the market price of the Common Stock of the Company immediately prior to the announcement of such Business Combination as the highest per share price determined in (i) above bears to the market price of the Common Stock of the Company immediately prior to the commencement of acquisition of the Common Stock of the Company by such Related Person, but in no event in excess of two times the highest per share price determined in (i) above; (2) After becoming a Related Person and prior to the consummation of such Business Combination, (i) such Related Person shall not have acquired any newly issued shares of capital stock, directly or indirectly, from the Company (except upon conversion of convertible securities acquired by it prior to becoming a Related Person or upon compliance with the provisions of this Article FOURTEEN or as a result of a pro rata stock dividend or stock split or other recapitalization) and (ii) such Related Person shall not have received the benefit, directly or indirectly (except proportionately as a stockholder) of any loans, advances, guarantees, pledges or other financial assistance or tax credits provided by the Company, or made any major changes in the business or equity capital structure of the Company; and (3) A proxy statement meeting the requirements of the Securities Exchange Act of 1934, as amended, and the applicable rules and regulations thereunder, whether or not the Company is then subject to such requirements, shall be mailed to the stockholders of the Company for the purpose of soliciting stockholder approval of such Business Combination and shall contain, prominently displayed (i) any recommendations as to the advisability (or inadvisability) of the Business Combination which the Continuing Directors, or any Outside Directors, may choose to state, and (ii) the opinion of a reputable national investment banking firm as to the fairness (or not) of the terms of such Business Combination, from the point of view of the stockholders of the Company who are not Related Persons or their Affiliates or Associates (such investment banking firm to be engaged solely on behalf of the stockholders who are not Related Persons or their Affiliates or Associates, to be paid a reasonable fee for its services by the Company upon receipt of such opinion, to be an investment banking firm which has not previously been associated with any such Related Person and, if there are then any such directors, to be elected by a 11 majority of the Continuing Directors and Outside Directors (as defined in Article FIFTEEN hereof)). FIFTEEN: As used in this Restated Certificate of Incorpora- tion, the terms hereafter defined shall have the following meanings: (A) The terms "Affiliate" and "Affiliated with" shall mean, with respect to a specific Person, a Person that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified. (B) The term "Associate" shall mean, when used to indicate a relationship with any Person, (1) any corporation, partnership, association or other organization (other than the Company or a majority-owned subsidiary of the Company) of which such Person is an officer, partner or, directly or indirectly, Beneficial Owner of ten percent (10%) or more of any class of equity securities or other beneficial or voting interest, (2) any trust or other estate in which such Person has a substantial beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity, (3) any relative or spouse of such Person, or any relative of such spouse, who has the same home as such Person, or (4) any investment company registered under the Investment Company Act of 1940 for which such Person or any Affiliate of such Person serves as investment adviser. (C) A Person shall be considered the "Beneficial Owner" of any shares or other beneficial or voting interest (whether or not owned of record): (1) With respect to which such Person or any Affiliate or Associate of such Person directly or indirectly has or shares (i) voting power, including the power to vote or to direct the voting of such shares or interests and/or (ii) investment power, including the power to dispose of or to direct the disposition of such shares or interests; (2) Which such Person or Affiliate or Associate of such Person has (i) the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, and/or (ii) the right to vote pursuant to any agreement, arrangement or understanding (whether such right is exercisable immediately or only after the passage of time); or (3) Which are Beneficially Owned within the meaning of (1) or (2) of this definition by any other Person with which such first-mentioned Person or any of its Affiliates or Associates has any agreement, arrangement or understanding, written or oral, with respect to acquiring, holding, voting or disposing of any shares of stock of the Company or any subsidiary of the Company or acquiring, holding or disposing of all or any Substantial Part of the assets or business of the Company or a subsidiary of the Company. 12 For the purpose only of determining whether a Person is the Beneficial Owner of a percentage of outstanding shares of the Company specified in this Restated Certificate of Incorporation, such shares shall be deemed to include any shares which may be issuable pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants, options or otherwise and which are deemed to be Beneficially Owned by such Person pursuant to the foregoing provisions of this definition. (D) The term "Business Combination" shall mean (1) any merger or consolidation of the Company or a subsidiary of the Company with or into a Related Person, (2) any sale, lease, exchange, transfer or other disposition, including, without limitation, a mortgage or any other security device, in a single transaction or series of related transactions, of all or any Substantial Part of the assets of the Company (including, without limitation, any voting securities of a subsidiary) or of a subsidiary of the Company to a Related Person, (3) any merger or consolidation of a Related Person with or into the Company or a subsidiary of the Company, (4) any sale, lease, exchange, transfer or other disposition, including without limitation, a mortgage or other security device, in a single transaction or series of related transactions, of all or any Substantial Part of the assets of a Related Person to the Company or a subsidiary of the Company, (5) the issuance of any securities of the Company or a subsidiary of the Company to a Related Person, (6) the acquisition by the Company or a subsidiary of the Company of any securities of a Related Person, (7) any reclassification of Common Stock of the Company, or any recapitalization involving Common Stock of the Company, consummated within five (5) years after a Related Person becomes a Related Person, (8) any liquidation or dissolution of the Company proposed, directly or indirectly, by or on behalf of a Related Person, (9) any merger or consolidation of the Company proposed, directly or indirectly, by or on behalf of Related Person, unless the surviving or consolidated corporation, as the case may be, has provisions in its certificate of incorporation substantially identical to Articles FOURTEEN, FIFTEEN and SIXTEEN hereof, or (10) any agreement, contract or other arrangement providing for any of the transactions described in this definition of Business Combination. A Business Combination with a Person shall be deemed to be a Business Combination with a Related Person if such Person is a Related Person at any of the following times: (i) the date any definitive agreement relating to a Business Combination is entered into or amended; (ii) the record date for the determination of stockholders entitled to notice of and to vote on a Business Combination; and (iii) immediately prior to the consummation of a Business Combination. (E) The term "Continuing Director" shall mean a director who was a member of the Board of Directors of the Company immediately prior to the time that any Related Person involved in the proposed Business Combination first became a Related Person. (F) The term "Other Consideration To Be Received" shall include, without limitation, shares of stock of the Company retained by any of its stockholders other than a 13 Related Person or its Affiliates or Associates in the event of a Business Combination with such Related Person in which the Company is the surviving entity. (G) The term "Outside Director" shall mean a director who is not (1) an officer or employee of the Company or any relative of an officer or employee, (2) a Related Person or an officer, director, employee, Associate or Affiliate of a Related Person, or a relative of any of the foregoing, or (3) a Person having a direct or indirect material business relationship with the Company. (H) The term "Person" shall mean any person, partnership, corporation, group or other entity (other than the Company, any subsidiary of the Company, or a trustee holding stock for the benefit of any of the employees of the Company or its subsidiaries, pursuant to one or more employee benefit plans or arrangements, but only in such capacity). When two or more persons act as a partnership, limited partnership, syndicate, joint venture, association or other group for the purpose of acquiring, holding or disposing of shares of stock, such partnership, syndicate, joint venture, association or group shall be deemed a "Person." (I) The term "Related Person" shall mean any Person which, together with any Affiliate or Associate, is the Beneficial Owner of ten percent (10%) or more of the outstanding Common Stock of the Company or of the outstanding voting stock of the Company or any Person which, together with any Affiliate or Associate, was at any time within the five (5) years preceding the date for such determination the Beneficial Owner of ten percent (10%) or more of the then outstanding Common Stock of the Company or of the outstanding voting stock of the Company. (J) The term "Substantial Part" shall mean more than ten percent (10%) of the total assets of the individual, corporation, partnership or other person or entity in question, as of the end of its most recent fiscal year ending prior to the time the determination is being made. SIXTEEN: The Company reserves the right to amend, alter, change or repeal any provision contained in this Restated Certificate of Incorporation, in the manner now or hereinafter prescribed by statute, and all rights conferred by stockholders herein are granted subject to this reservation. Notwithstanding the foregoing, the provisions set forth in Articles FOURTEEN, FIFTEEN and this SIXTEEN may not be amended, altered, changed or repealed in any respect if there is then a Related Person unless such amendment, alteration, change or repeal is approved (i) by the affirmative vote of the holders of not less than eighty percent (80%) of the total voting power of the Company and (ii) also by the affirmative vote of the holders of not less than a majority of the total voting power of the Company other than a Related Person and any Affiliates and Associates of such a Related Person. SEVENTEEN: No director shall have any personal liability to the Company or its stockholders for any monetary damages for breach of fiduciary duty as a director, except that this Article shall not eliminate or limit the liability of each director (i) for any breach of such 14 director's duty of loyalty to the Company or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for unlawful payment of a dividend or unlawful stock purchase or redemption under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which such director derived an improper personal benefit. Any repeal or modification of the preceding sentence by the stockholders of the Company shall not adversely affect any right or protection of a director of the Company existing at the time of such repeal or modification. IN WITNESS WHEREOF, HOMESTAKE MINING COMPANY has caused this Restated Certificate of Incorporation to be signed by Jack E. Thompson, its Chairman, President and Chief Executive Officer, and attested by Wayne Kirk, its Secretary, this first day of December, 1998. HOMESTAKE MINING COMPANY By Jack E. Thompson Jack E. Thompson, Chairman, President and Chief Executive Officer Attest: By Wayne Kirk Wayne Kirk Secretary 15 EX-10.4 3 DIRECTOR'S COMPENSATION PLAN EXHIBIT 10.4 HOMESTAKE MINING COMPANY 1998 OUTSIDE DIRECTORS' STOCK COMPENSATION PLAN The Plan was adopted by the Board on September 24, 1998, and will be submitted for approval by Homestake's stockholders at the next meeting of stockholders held after Board Approval. Contingent upon stockholder approval, the Plan is generally effective as of January 1, 1999, except as specified below in Article 8, relating to initial grants of Share Rights. Capitalized terms used herein shall have the meanings provided in Article 12. ARTICLE 1. SHARE OWNERSHIP POLICY; PLAN PURPOSE. It is hereby declared to be the policy of Homestake that Outside Directors are expected to own Shares equal in value to three times the amount of the Annual Retainer. Outside Directors are expected to achieve that level of ownership within five years from the later of (i) the effective date of the Plan or (ii) the date of election as a Director. The purpose of the Plan is to facilitate compliance with this share ownership policy and to promote the interests of Homestake by attracting and retaining qualified individuals who are neither employees nor officers of Homestake or a subsidiary to serve as directors of Homestake. The Plan is intended to further align the interests of outside directors with the interests of stockholders of Homestake, thereby promoting longterm growth and performance of Homestake. The Plan is intended to supersede Article 7 of the Homestake Mining Company Stock Option and Share Rights Plan 1996 and, on the date the Plan becomes effective, no further grants shall be made to Eligible Directors under that plan. ARTICLE 2. ADMINISTRATION. The Plan shall be administered by the Board. The Board shall administer the Plan in accordance with the Plan and shall have all powers and discretion necessary or appropriate to administer the Plan, including but not limited to, the power to (a) interpret the Plan and (b) make all other decisions relating to the operation of the Plan. The Board may adopt such rules or guidelines as it deems appropriate to implement the Plan. The Board's determinations under the Plan shall be final and binding on all persons. No member of the Board shall be liable for any action or decision made in good faith in connection with the exercise of the Board's duties under the Plan. ARTICLE 3. SHARES AVAILABLE FOR GRANTS. 3.1 Basic Limitation. Shares issued pursuant to the Plan shall be authorized but unissued Shares or treasury Shares. The aggregate number of Shares that may be issued under the Plan shall not exceed 250,000. The limitations of this Section 3.1 shall be subject to adjustment pursuant to Section 3.3. 3.2 Available Shares. If Restricted Shares or Share Rights are forfeited or terminate for any other reason before being exercised, then such Restricted Shares and Shares subject to such Share Rights shall again become available for Awards under the Plan. If cash is paid in lieu of the issuance of Shares, the number of Shares with respect to which such payment is made shall not again be available under the Plan. 3.3 Adjustments. In the event of a reorganization, recapitalization, stock split, stock dividend, combination of Shares, merger, consolidation, rights offering, or any other change in the corporate structure or Shares of Homestake, the Board shall make such adjustment, if any, as it may deem appropriate in the number and kind of Shares authorized by the Plan, and in the number and value of Shares covered by Awards. ARTICLE 4. PARTICIPATION IN THE PLAN. Only Eligible Directors are eligible to participate in the Plan. ARTICLE 5. AGREEMENTS. All Awards shall be evidenced by an Agreement signed by the Eligible Directors and Homestake. Each Award shall be subject to the terms and conditions of the Plan and to such other terms and conditions as may be established by the Board. ARTICLE 6. ANNUAL RETAINER. 6.1 Portion of Annual Retainer Payable in Shares. With respect to each Annual Service Period, each Eligible Director shall receive, in lieu of cash, unrestricted Shares having a Fair Market Value equal to 50% of his or her Annual Retainer. The number of Shares to be issued pursuant to Section 6.1 on each date that a part of the Annual Retainer is payable shall be determined by dividing 50% of the Annual Retainer that would otherwise have been paid in cash on each payment date (but for this Section 6.1) by the Fair Market Value of a Share on that date. The Shares shall be issued as soon as is reasonably possible after the dates on which the cash portion of the Annual Retainer is to be paid. 6.2 Election to Receive Additional Shares. Not later than ten Business Days prior to the first day of an Annual Service Period or, if later, the date on which an individual first becomes an Eligible Director, an Eligible Director may, by filing a written Annual Election with Homestake, direct Homestake to pay to such Eligible Director, in the form of unrestricted Shares, some or all of the cash portion of the Annual Retainer payable to such Eligible Director for the related Annual Service Period. Any Annual Election shall be effective for the entire Annual Service Period to which the Annual Election relates. The number of Shares to be issued pursuant to an Annual Election shall be determined by dividing the amount of the Annual Retainer that would otherwise have been paid in cash on each payment date (but for this Section 6.2) by the Fair Market Value of a Share on that date. Such Shares shall be issued as soon as is reasonably possible after the dates on which that portion of the Annual Retainer would have been paid in 2 cash. If the Annual Retainer is increased during the Annual Service Period, Eligible Directors shall receive such increase in cash and not Shares, regardless of whether an Annual Election has been made. 6.3 Bonus Restricted Shares. Each Eligible Director who has made an Annual Election pursuant to Section 6.2, shall also receive one Restricted Share for each four Shares issued pursuant to Section 6.2. The Restricted Shares shall be subject to the provisions of Article 7. 6.4 Election to Defer. Not later than ten Business Days prior to the first day of an Annual Service Period or, if later, the date on which an individual first becomes an Eligible Director, an Eligible Director may elect to defer, in accordance with the Homestake Deferred Compensation Plan, receipt of Shares to be issued pursuant to Sections 6.1 and 6.2 during the Annual Service Period to which the election relates. To the extent that any Eligible Director elects to defer the receipt of Shares, such number of deferred stock units shall be credited to the Eligible Director's Deferred Compensation Plan account, and such Deferred Compensation Plan account shall be credited with all dividends and distributions payable with respect to the number of Shares equal to that number of deferred stock units. ARTICLE 7. TERMS OF RESTRICTED SHARES. 7.1 Restrictions. The Restricted Shares may not be sold, assigned, transferred, pledged or otherwise encumbered, except as otherwise specifically provided, prior to the lapse of the restrictions. 7.2 Issuance of Shares. Homestake shall cause each certificate representing Restricted Shares awarded hereunder to be deposited by Homestake with a custodian (which may be Homestake) to be designated by Homestake. In such event, Homestake shall cause such custodian to issue to the Eligible Director a receipt evidencing any stock certificates and accrued dividends thereon held or to be held by the custodian for the benefit of such Eligible Director. Upon lapse of the restrictions, Homestake shall cause the certificates and accrued dividends paid in respect of such Shares to be issued and paid to the Eligible Director. 7.3 Forfeiture. Restricted Shares shall be forfeited and shall be returned to Homestake and all rights of the Eligible Director to the Restricted Shares shall terminate without any payment of consideration by Homestake if the Eligible Director ceases to be a Director prior to the lapse of the restrictions. 7.4 Lapse of Restrictions. The restrictions shall lapse in accordance with this section. (a) Restrictions shall lapse with respect to the first 50% of the Restricted Shares comprising an Award of Restricted Shares to an Eligible Director on the first anniversary of the Grant Date. (b) Restrictions shall lapse with respect to an additional 25% of such Restricted Shares on the second anniversary of the Grant Date. 3 (c) Restrictions shall lapse with respect to the final 25% of such Restricted Shares on the third anniversary of the Grant Date. (d) In the event that an Eligible Director ceases to be a Director prior to the lapse of restrictions as described above within one year following a Change of Control, or by reason of death, disability, or retirement at mandatory retirement age for Directors, the restrictions on all Restricted Shares (and accrued dividends thereon) awarded to such Eligible Director shall lapse on the date the Eligible Director ceases to be an Director. (e) The Board shall have the authority to accelerate the time at which the restrictions will lapse or to remove any of such restrictions whenever it decides, in its sole discretion, that, by reason of changes in applicable law or other material changes in circumstances arising after the date of the Award, such action is in the best interests of Homestake and equitable to the Eligible Director. 7.5 Voting Rights. Prior to lapse of the restrictions on Restricted Shares, Eligible Directors shall not have any right to vote with respect to those Restricted Shares, unless otherwise provided in the Agreement. 7.6 Dividends. Prior to lapse of the restrictions, dividends and other distributions shall be credited to Restricted Shares, but not paid to Eligible Directors, unless otherwise provided in the Agreement. After lapse of the restrictions, Eligible Directors shall be entitled to receive all dividends and other distributions accrued since the Grant Date with respect to such Restricted Shares, unless otherwise provided in the Agreement. ARTICLE 8. INITIAL GRANTS OF SHARE RIGHTS; ANNUAL GRANTS OF SHARE RIGHTS 8.1 Initial Grant of Share Rights. Effective January 1, 1997, upon first being elected to the Board, each Eligible Director shall be granted Share Rights providing for the issuance of 2,000 Shares. For purposes of Section 8.4, the date of election to the Board shall be the Grant Date for Eligible Directors elected between January 1, 1997 and the effective date of the Plan. 8.2 Annual Grant of Share Rights. Effective January 1, 1999, on the first day of each Annual Service Period, each Eligible Director shall be granted Share Rights providing for the issuance of 1,000 Shares attributable to services performed during the preceding Annual Service Period. Annual Grants to Eligible Directors who were not Eligible Directors for the entire preceding Annual Service Period shall be prorated and rounded to the nearest whole Share based on the number of days actually served as an Eligible Director during such Annual Service Period. 8.3 Forfeiture. Share Rights shall be canceled if the Eligible Director ceases to be a Director before the lapse of the restrictions. 4 8.4 Lapse of Restrictions. The restrictions imposed on Share Rights shall lapse upon the earlier of: (i) the third anniversary of the Grant Date, (ii) the date the Eligible Director ceases to be a Director within one year following a Change of Control, or (iii) the date the Eligible Director ceases to be a Director by reason of death, disability, or retirement at mandatory retirement age for Directors. 8.5 Payment of Share Rights. If the restrictions imposed on an Eligible Director Share Right lapse, the Shares to which such Share Right relates shall be issued to the Eligible Director as soon as reasonably possible after the date the Eligible Director ceases to be a Director. ARTICLE 9. PLAN TERM; AMENDMENT; TERMINATION. 9.1 Plan Term. The Plan shall be effective upon approval at the next meeting of stockholders held after Board Approval. Unless terminated sooner in accordance with Section 9.2, no Award may be granted after the earlier of (i) December 31, 2008, or (ii) the date on which all Shares (or Share Rights in respect thereof) available for issuance under the Plan have been issued or canceled pursuant to the exercise or surrender of Awards under the Plan. 9.2 Amendment or Termination. Except as hereafter provided, the Board may, at any time and for any reason, amend or terminate the Plan. The foregoing notwithstanding, any amendment of the Plan shall be subject to the approval of Homestake's stockholders to the extent required by applicable laws, regulations or rules, or to the extent any such amendment shall (i) increase the maximum number of Shares issuable under the Plan (except in accordance with Section 3.3), (ii) increase the benefits accruing to Eligible Directors, or (iii) modify the eligibility requirements for Awards. No Awards shall be granted under the Plan after the termination of the Plan. The termination of the Plan, or any amendment thereof, shall not affect any Award previously granted under the Plan. ARTICLE 10. REGULATORY APPROVAL, REGISTRATION, AND INVESTMENT PURPOSE. 10.1 Regulatory Approval. The implementation of the Plan, the issuance of Restricted Shares and the granting of any Share Rights shall be subject to Homestake's procurement of all approvals and permits required by regulatory authorities having jurisdiction over the Plan, and the Shares issued pursuant to it. 10.2 Registration. The Plan, the Shares subject thereto, and the Share Rights granted thereunder may, in the discretion of the Board, be registered under the Securities Act and under the securities laws of any state, province or country. Unless the Share Rights or the Shares shall have been registered under the Securities Act, each grant of Share Rights and each grant of Shares shall be for investment and not with a view to resale or distribution of such Shares contrary to any applicable securities laws. As a condition to the issuance of any Shares which are not registered under such Act, the Eligible Director and his or her legal representative, executor, administrator, heir or legatee, as the case may be, receiving such Shares shall deliver to 5 Homestake a writing, in form and substance satisfactory to Homestake and its counsel, implementing such agreement. ARTICLE 11. MISCELLANEOUS. 11.1 No Right to Continue as a Director. Neither the Plan nor any Award granted under the Plan shall be deemed to give any individual a right to remain a Director of Homestake, an Affiliate or any other person. Homestake reserves the right to terminate the service of any Director in accordance with Homestake's Certificate of Incorporation, its Bylaws or applicable law. 11.2 Shareholders' Rights. Except as otherwise provided in an Agreement, an Eligible Director shall have no dividend rights, voting rights or other rights as a shareholder with respect to any Shares covered by an Award prior to the issuance of a stock certificate for such Shares and delivery thereof to such Director. 11.3 Rule 16b3. Homestake intends that, with respect to persons subject to Section 16 of the Exchange Act, this Plan and the issuance of Restricted Shares, Share Rights and Shares issued on account of Share Rights will qualify under Rule 16b3 promulgated thereunder. So long as Homestake has any class of equity securities registered under the Exchange Act, to the extent required to avoid application of Section 16(b) of the Exchange Act to an acquisition of Shares, any equity security, as defined in the Exchange Act or the rules and regulations thereunder, granted pursuant to the Plan, must be held for six months from the Grant Date, and in the case of any derivative security (as defined in the rules and regulations promulgated under Section 16) offered pursuant to the Plan, at least six months must elapse from the date of acquisition of the derivative security to the date of disposition of the derivative security (other than upon exercise or conversion) or its underlying equity security, except in the event of the death or disability of the holder thereof. If any provision of the Plan or an Agreement requires modification to comply with the requirements of Section 16 and the rules thereunder, the Board may waive, amend or modify the Plan or the Agreement accordingly. To the extent that any provision of this Plan or action by the Board fails to comply with the Section 16 rules, it shall be null and void to the extent permitted by law and deemed advisable by the Board. 11.4 Transferability. Restricted Shares and rights to dividends thereon (prior to lapse of restrictions thereon) and Share Rights granted under the Plan shall not be transferable other than by will or the laws of descent or distribution; provided, however, to the extent permitted by Rule 16b3 or any successor rule, an Agreement with respect to Restricted Shares and Share Rights may permit transfers, (i) in connection with an Eligible Director's estate plan, to (a) an Eligible Director's family members, (b) a trust for the benefit of the Eligible Director or the Eligible Director's family members, or (c) other members of the Eligible Director's household, or (ii) pursuant to a qualified domestic relations order as defined by the Internal Revenue Code of 1986, as amended, or Title I of the Employee Retirement Income Security Act, or the rules thereunder. 6 11.5 Governing Law. The Plan and all Agreements shall be construed in accordance with and governed by the laws of the State of Delaware. 11.6 Payment of Taxes. Homestake shall have the right to require, prior to the issuance or delivery of any Shares or dividends thereon, payment by an Eligible Director of any taxes required by law with respect to the issuance or delivery of such Shares or dividends. With respect to tax withholding required upon the grant of Shares, upon the lapse of restrictions on Restricted Shares, or upon any other taxable event arising out of or as a result of any grant or Award made hereunder, Eligible Directors may elect to satisfy the withholding requirement, in whole or in part, by tendering previously owned Shares or by having Homestake withhold Shares having a Fair Market Value on the date the tax is to be determined equal to the minimum statutory total tax which could be imposed on the transaction. All elections shall be irrevocable, made in writing, and signed by the Eligible Director. 11.7 Costs. Homestake shall bear all expenses incurred in administering the Plan, including expenses related to the award and issuance of Shares, Restricted Shares and Share Rights. 11.8 Fractional Shares. In all instances, cash shall be paid in lieu of fractional Shares in an amount equal to the Fair Market Value of the fractional Shares on the date the fractional Shares would otherwise be payable. ARTICLE 12. DEFINITIONS. 12.1 General Definitions. The following words and phrases, when used in the Plan, unless otherwise specifically defined or unless the context clearly otherwise requires, shall have the following meanings: "Agreement" means the written agreement setting forth the terms and provisions applicable to each Award granted under the Plan. "Annual Election" means an irrevocable election made in accor- dance with Section 6.2. "Annual Retainer" means the annual retainer to be paid by Homestake to an Eligible Director with respect to an Annual Service Period, at the rates determined by the Board in advance of such period. "Annual Service Period" means an annual period determined by the Board, which annual period shall be January 1 through December 31 or such other annual period as may be designated from time to time by the Board of Directors. "Award" means any award of Shares, Restricted Shares or Share Rights under the Plan. "Board" means Homestake's Board of Directors, as constituted from time to time. 7 "Change in Control" means the occurrence of any of the following events: (a) Homestake is a party to a merger or combination under the terms of which less than 75% of the shares in the resulting or continuing publicly held company are owned by the shareholders of Homestake immediately preceding such event; or (b) At least 75% in fair market value of Homestake's assets are sold; or (c) At least 25% in voting power in election of Directors of Homestake's capital stock is acquired by any one person or group as that term is used in Rule 13d5 under the Exchange Act. "Code" means the Internal Revenue Code of 1986, as amended. "Director" means a member of the Board. "Eligible Director" means a Director who is not an employee of Homestake or any of its subsidiaries or affiliates. Directors emeritus shall not be eligible to participate. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Fair Market Value" means the fair market value of Shares, determined by the Board, in its sole discretion. "Grant Date" means, with respect to an Award, the date that the Award is deemed granted under the Plan. Within a reasonable time thereafter, Homestake will execute and deliver an Agreement to the Eligible Director. "Homestake" means Homestake Mining Company, a Delaware corp- oration. "Plan" means this Homestake Mining Company 1998 Outside Directors' Stock Compensation Plan, as it may be amended from time to time. "Restricted Share" means a Share which is subject to the res- trictions set forth in Section 7. "Securities Act" means the Securities Act of 1933, as amended. "Share" means one share of the common stock of Homestake. "Share Right" means the right to acquire a Share for no consi- deration. 8 12.2 Other Definitions. In addition to the above definitions, certain words and phrases used in the Plan and any Agreement may be defined in other portions of the Plan or in an Agreement. IN WITNESS WHEREOF, HOMESTAKE MINING COMPANY has executed this Plan as of December 1, 1998. HOMESTAKE MINING COMPANY By: Wayne Kirk Wayne Kirk Vice President, General Counsel and Secretary EX-99.7 4 NEWS REL. PRIME ACCEPTS HOMESTAKE'S OFFER EXHIBIT 99.7 News Release Homestake Mining Company 650 California Street San Francisco, CA 94108 Stephen A. Orr Vice President Investor Relations 415-983-8169 PRIME RESOURCES GROUP ACCEPTS HOMESTAKE MINING COMPANY'S OFFER TO ACQUIRE MINORITY INVESTMENT IN PRIME San Francisco, CA - DECEMBER 1, 1998 - Homestake Mining Company (NYSE: HM) announced today that the shareholders of Prime Resources Group Inc. (TSE, VSE, AMEX: PRU) have approved a resolution to accept Homestake's offer to acquire the 49.4% of Prime it does not already own. Under the terms of the offer, Prime shareholders (other than Homestake) had the choice of receiving 0.74 of a Homestake common share or 0.74 of a Homestake Canada Inc. (HCI) exchangeable share. Prime shareholders that did not exercise the option to receive Homestake common stock by November 30, 1998, will receive HCI Exchangable shares. Each HCI exchangeable share may be exchanged at any time for one Homestake common share, and will have dividend and voting rights equivalent to those of one Homestake common share. Homestake expects final Canadian regulatory approval by December 3, 1998 at which time the Company will own 100% of Prime through a wholly owned subsidiary, Homestake Canada Inc. Homestake will issue approximately 27.8 million shares valued at $300 million to complete the purchase. The acquisition simplifies Homestake's corporate structure, unifies the Company's presence in Canada and eliminates costs associated with maintaining a separate public company. In addition, the Company increases its interest in low-cost production and reserves from the Eskay Creek Mine, clearly enhancing Homestake's position as one of the world's leading gold mining companies. Jack E. Thompson, Chairman, President and Chief Executive Officer of Homestake commented: "This transaction contributes to Homestake's continuing strategy of growth through quality assets. It will allow Homestake stockholders to benefit fully from Eskay Creek's potential and provides former Prime shareholders the opportunity to participate in Homestake's global growth strategy." To help facilitate the Prime acquisition and provide for future growth, Homestake shareholders approved a Restated Certificate of Incorporation. The restated certificate has increased the number of shares that the company can issue from 250 million to 450 million. Homestake's shareholders also approved an Outside Directors' Stock Compensation Plan that provides for external Directors to receive a substantial portion of their compensation in Homestake common stock. Homestake Mining Company is an international gold mining company with operations and exploration activities in the United States, Canada, Australia and Chile. Homestake also has active exploration programs in Latin America and Eastern Europe. Homestake began gold mining operations over 120 years ago, and is the oldest listed company on the New York Stock exchange still in its original business. It has received numerous industry environmental and safety awards for its responsible environmental health and safety stewardships. EX-99.8 5 NEWS RELEASE HMCO COMPLETES PRIME ACQ EXHIBIT 99.8 News Release Homestake Mining Company 650 California Street San Francisco, CA 94108 Stephen A. Orr Vice President Investor Relations 415-983-8169 HOMESTAKE MINING COMPANY COMPLETES ACQUISITION OF PRIME RESOURCES GROUP San Francisco, CA - DECEMBER 3, 1998 - Homestake Mining Company (NYSE: HM) announced today it has completed the acquisition of the 49.4% of Prime Resources Group Inc. (TSE, VSE, AMEX: PRU) it does not already own. As a result of this transaction, Homestake owns 100% of Prime Resources through Homestake's wholly owned subsidiary, Homestake Canada Inc. The company will issue approximately 27.8 million shares valued at $300 million to complete the purchase. Homestake Mining Company is an international gold mining company with operations and exploration activities in the United States, Canada, Australia and Chile. Homestake also has active exploration programs in Latin America and Eastern Europe. Homestake began gold mining operations over 120 years ago, and is the oldest listed company on the New York Stock exchange still in its original business. It has received numerous industry environmental and safety awards for its responsible environmental health and safety stewardships. -----END PRIVACY-ENHANCED MESSAGE-----